Which of the following is a valid assumption from an accounting perspective? O A company that has declared bankruptcy is referred to as a going concern. O Financial statements should be prepared on a calendar-year basis. O Financial statements are prepared for a specific entity that is distinct from the entity's owners. O The results of customer satisfaction surveys should be reported in the financial statements because such results could impact decisions of financial statement users.

Which of the following is a valid assumption from an accounting perspective? O A company that has declared bankruptcy is referred to as a going concern. O Financial statements should be prepared on a calendar-year basis. O Financial statements are prepared for a specific entity that is distinct from the entity's owners. O The results of customer satisfaction surveys should be reported in the financial statements because such results could impact decisions of financial statement users.

Name: Which of the following is a valid assumption from an accounting persp
Uploaded: 2024-03-04T10:43:15.000Z
Channel: Bartleby
Description: Which of the following is a valid assumption from an accounting perspective?O A company that has declared bankruptcy is referred to as a going concern.O Financial statements should be prepared on a calendar-year basis.O Financial statements are prep

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: What is the primary objective of assurance services? To provide expert advice and recommendations…

A: Assurance services are professional endeavors carried out by auditors or other certified…

Q: Define each when dealing with financial responsibility: Accounting and financial reporting matters…

A: Financial Responsibility:-It is the responsibility of one to manage the money so that it will be in…

Q: 1.Explanation of how the problem with poor record keeping is impacting the current accounting…

A: Poor record keeping can have a significant impact on the accounting framework and environment of an…

Q: Which one of these statements about the accrual-basis of accounting is false? This basis is in…

A: Cash basis of accounting recognize the expenses or revenues when they are paid or received. Accrual…

Q: None

A: Matching Substantive Procedures with Assertions: Inspect activity in all long-term debt and related…

Q: Which of the following terms defines the underlying assumption of Going Concerns? A The company is…

A: The companies use a set of rules and guidelines in the preparation of financial statements with a…

Q: An accountant need not assess compliance with independence rules duringa. An examination of…

Q: Which of the following is not a typical note included in the notes to financial statements? Group…

A: Notes to financial statements are necessary to report the assumption and methods applied while…

Q: When a company changes from one accounting principle to another accounting principle: a…

A: Retrospective adjustment means the adjustment is made to all the financial statements of the prior…

Q: . Which of the following is not a typical note included in an annual report? O A. A note describing…

A: Answer Annual report form part of A note describing that the accounting policies are…

Q: Which of the following statements is correct in relation to the contents of the IASB Conceptual…

A: The objective of the question is to identify the correct statement in relation to the contents of…

Q: Which of the following statements about GAAP is not true? O a. GAAP impacts how companies report and…

A: GAAP is the set of generally accepted accounting principles, which tell about what are the rules,…

Q: Financial statements are based on generally accepted accounting principles (GAAP) and are audited by…

A: The question seeks to know the investor's approach about the validity of financial statements based…

Q: PROBLEM 1: MULTIPLE CHOICE 1. During the period, an entity acquires an investment. The entity has a…

A: If Investment's business model is to hold to collect and sell, then it shall be measured at fair…

Q: A company’s management believes that substantial doubt exists that the company can meet its…

A: Definition: Financial statements: Financial statements are condensed summary of transactions…

Q: Which of the following statement best describes the accounting concept of going concern? O Expenses…

A: Accounting Concept -The foundational guidelines, presumptions, and requirements that specify the…

Q: How can the enhancing characteristic timeliness be improved in high-quality accounting information?…

A: Accounting information is the information which is used by the stakeholders of the company to take…

Concept explainers

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is

Topic Video

Question

Which of the following is a valid assumption from an accounting perspective?
O A company that has declared bankruptcy is referred to as a going concern.
O Financial statements should be prepared on a calendar-year basis.
O Financial statements are prepared for a specific entity that is distinct from the entity's owners.
O The results of customer satisfaction surveys should be reported in the financial statements because such results could impact decisions of financial statement users.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

A certain contingent liability was evaluated at year-end, and considered to have a reasonable possibility of becoming an actual liability. If the accountant decided not to report it in the notes to the financial statement, what effect would this have on the financial reporting of the company? A The liabilities on the balance sheet would be understated B The information about the item would be inadequately disclosed in the notes C The net income of the company would be understated D There would be no effect
PSA 570 (Going Concern) states that a fundamental principle in the preparation of financial statements is the going concern assumption. Under this assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws and regulations. The responsibility to make an assessment of an entity's ability to continue as a going concern rests with the Auditor Entity's management SEC Entity's creditors
What is the role of GAAP (Generally Accepted Accounting Principles) in the practice of accounting, and how do companies ensure compliance with these standards?
What is a chance recently implemented by FASB that required a company to change its accounting principal? How did it impact the companies financial statements?
Best choice
What is the main purpose of information presented in notes to the financial statements? • To provide disclosures required by generally accepted accounting principles. To correct improper presentation in the financial statements. To provide recognition of amounts not included in the totals of the financial statements. To present management's responses to auditor comments.
A prepaid expense is one of the assets which are on a balance sheet that a company or rather a business is paying in advance for the services and goods that they are yet to receive in the future. Prepaid expenses’ value is made over time onto the income statement but is initially recorded as an asset. So as to ensure a record sense of accountability, a company must adjust these expenses so as to ensure that the expenses are recognized within the period that the expenses are incurred within the business period. This expense is placed in the debit column before it expired, however, it has to be moved to the credit column. There are a number of adjustments that most of the companies do make entries to before they prepare their ultimate report on the financial period. Some of these adjustments include; accrued expenses, accrued revenue, depreciation expenses and even deferred revenues. What is your opinion?
What is the accounting equation for a trustee in a bankruptcy proceeding (i.e., corporate liquidation)? a. Assets equal accountability b.Assets equal liabilities plus owner’s equity c.Assets equal liabilities minus estate deficit d.Assets minus liabilities equals accountability
Need answer
Accounting concepts form the fundamental principles upon which financial accounting is based. These concepts provide a framework for recording, reporting, and interpreting financial transactions in a consistent and meaningful manner. One of the key accounting concepts is the principle of conservatism, which dictates that when faced with uncertainty, accountants should err on the side of caution by recognizing potential losses immediately while delaying the recognition of potential gains until they are realized. This concept ensures that financial statements provide users with a reliable representation of an entity's financial position and performance, even in the face of uncertainty Question: How does the principle of conservatism contribute to the reliability of financial statements?